Sharp revenues boosted by weaker yen

Sharp Corp, Japan’s worst-performing major stock last year, said higher demand for LCD TVs and home appliances, coupled with a weaker yen, are improving earnings as it considers ways to boost capital.

Revenue in September, October, November and last month each surpassed year-earlier results, Sharp president Takashi Okuda told reporters yesterday.

Sharp, which lost 55 percent of its market capitalization last year, will disclose its strategy for increasing capital in its medium-term plan by March 31, he said, declining to say whether the company is in talks with any parties to sell new shares.

“LCD TV demand has been recovering,” Okuda said. Sales of appliances are “robust,” and the weakened Japanese currency is a tailwind for the company, he said.

The maker of Aquos TVs warned in November last year about its ability to survive after hemorrhaging ￥103 billion (US$1.2 billion) in cash from operations in the fiscal first half of the year amid falling demand and competition from Samsung Electronics Co.

Last month, Sharp turned to Qualcomm Inc, the biggest maker of mobile phone chips, for as much as ￥9.9 billion in new capital after failing to secure a planned investment from Foxconn Technology Group (富士康).

Sharp sent a letter to Foxconn asking for a progress report on the Taiwanese company’s possible investment, Okuda said. The companies are continuing discussions, though Okuda said he has not met directly with Foxconn chairman Terry Gou (郭台銘) since October last year.

“A public share offering is among many ways to boost capital,” Okuda said. “There is the problem of dilution. We are looking for the best option for us.”

The Osaka-based company’s interest-bearing debt totaled ￥1.2 trillion as of Sept. 30 last year, its highest, while its net asset ratio fell to 10.3 percent, less than half of what it was six months ago, Sharp said in November last year.

Shares in Sharp fell 4.1 percent to ￥283 as of 2:45pm yesterday in Tokyo trading. The stock’s decline last year was the largest on Japan’s benchmark Nikkei 225 Stock Average.

Sharp is forecasting a record ￥450 billion full-year loss for the fiscal year ending March 31.

The company is selling assets and cutting jobs to revive its profits after posting a record ￥376 billion loss last fiscal year.